Man to Man Pty Ltd T/A Man to Man v Dib Mekkaoui

[2016] FWC 97

[2016] FWC 97

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120—Redundancy pay

Man to Man Pty Ltd T/A Man to Man
v
Dib Mekkaoui
(C2015/6958)

COMMISSIONER GREGORY MELBOURNE, 6 JANUARY 2016

Variation of redundancy pay.

[1] Man to Man Pty Ltd T/A Man to Man (Man to Man) decided in October 2015 to close its Epping store in Melbourne’s northern suburbs. The closure took effect on 6 November and resulted in the Store Manager’s role being made redundant. The Store Manager, Mr Dib Mekkaoui, had been employed by the business for more than eight years up to that point.

[2] Man to Man has now made application to reduce the redundancy entitlement otherwise due to Mr Mekkaoui because it submits it made an offer to him of “acceptable employment” at another store location. Mr Mekkaoui opposes the application.

[3] Mr Rowan Young, the Head of Retail, appeared on behalf of Man to Man. Mr Mekkaoui appeared on his own behalf. Both parties also filed written submissions in accordance with the Directions issued, however, neither sought to cross-examine the other.

The Issue to be Determined

[4] Section 119 of the Fair Work Act 2009 (the Act) provides a statutory entitlement to redundancy pay with the applicable amount determined by the employee’s length of continuous service. Mr Mekkaoui’s period of continuous service with Man to Man entitles him to 14 weeks redundancy pay.

[5] However, s.120 of the Act provides the Commission with a discretion to reduce or remove an entitlement to redundancy pay, on application, should the Commission consider it appropriate. Section 120 states in full:

“(1) This section applies if:

(a) an employee is entitled to be paid an amount of redundancy pay by the employer because of section 119; and

(b) the employer:

(i) obtains other acceptable employment for the employee; or

(ii) cannot pay the amount.

(2) On application by the employer, the FWC may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that the FWC considers appropriate.

(3) The amount of redundancy pay to which the employee is entitled under section 119 is the reduced amount specified in the determination.” 1

[6] In the present matter Man to Man submits the amount of redundancy pay due to Mr Mekkaoui should be reduced to four weeks because it obtained “other acceptable employment” for him.

[7] Therefore:

• has Man to Man obtained “other acceptable employment” for Mr Mekkaoui as provided for in s.120(b)(i) of the Act?



• if so, is it appropriate to reduce the redundancy pay entitlement otherwise due to him, and by what amount?

The Submissions and Evidence

[8] Man to Man submits it closed its Epping store on 6 November after the termination of its lease. On 13 October it offered to redeploy the Store Manager, Mr Dib Mekkaoui, to its Craigieburn store because of a vacancy at that location.

[9] However, it submits Mr Mekkaoui declined that redeployment offer because the Craigieburn location was too far from his home address. It also submits that in subsequent discussions with Man to Man’s HR manager, Ms Bree Engert, Mr Mekkaoui indicated he would like to remain with the business, but was not prepared to move to the Craigieburn store.

[10] It submits it then decided to relocate a recently appointed Store Manager at the Broadmeadows store to the Craigieburn store, and to offer Mr Mekkaoui the Store Manager role at Broadmeadows instead. This offer was confirmed in an email provided to Mr Mekkaoui on 15 October. Man to Man submits the position at the Broadmeadows store involved the same roles and responsibilities as at the Epping store, as well as the same salary arrangements. It also submits the location of the store is only around three kilometres from the store at Epping. It also rejects any suggestion that there is any uncertainty about the future of the Broadmeadows store, and says it is locked into a long-term lease at that location.

[11] However, Man to Man submits Mr Mekkaoui rejected this offer and advised he did not want to work at the shopping centre where the Broadmeadows store is located. It submits it then advised him it would be making application for a reduction in the redundancy entitlements due to him as it believed this was “a genuine redeployment opportunity”. 2 It subsequently made that application on the following day. In its submission the offer to relocate to the Broadmeadows store was a fair and reasonable one and, in all the circumstances, it is appropriate for the Commission to exercise its discretion to reduce the amount of redundancy pay due to Mr Mekkaoui to an amount of four weeks pay.

[12] Mr Mekkaoui submits he was advised by the State Manager, Mr Clint Magill, on 13 October that the Epping store would be closing. He said he was also told he had the option of either moving to the Craigieburn store or taking a redundancy package. He submits he indicated in response that the Craigieburn location was too far for him to travel and he would be opting to take the redundancy offer.

[13] He said he then had a discussion with Ms Bree Engert, the HR Officer, and asked her what the redundancy package would involve and was told he was entitled to 14 weeks redundancy pay, together with his long service leave and other outstanding accrued entitlements.

[14] Mr Mekkaoui submits he then received a call from Mr Magill on 15 October advising him that he wanted to speak with him at the Epping store that afternoon. However, Mr Magill later called again and indicated he was caught up in traffic. He said Mr Magill then said a position at the Broadmeadows store was now available. Mr Mekkaoui said he responded by indicating he would like some time to consider this offer, but was advised he was required to either accept the offer or resign. He said he then told Mr Magill the option of relocating to the Broadmeadows store was not feasible because it was too far for him to travel, and he had already decided to take the redundancy package.

[15] Mr Mekkaoui submits he then contacted Ms Engert again and told her about the conversation with Mr Magill. He said he also told her about “…the travel and location constraints associated with my accepting the Broadmeadows offer.” 3 He said Ms Engert responded by indicating if he did not accept the Broadmeadows position his redundancy entitlement would likely “…be drastically reduced.”4

[16] Mr Mekkaoui denies he made any reference to not liking the centre where the Broadmeadows store is located, and said he clearly told both Mr Magill and Ms Engert that moving to the Broadmeadows location would involve “…excessive travel times and limited transport options,” and for these reasons he did not believe it provided acceptable alternative employment. 5 He also submits that when this offer was made he had already accepted the option of taking a redundancy package.

[17] Mr Mekkaoui also indicated in response to questions from the Commission that he had some concerns about the ongoing operation of the Broadmeadows store and noted that its fitout was old, which contributed to his concerns about whether Man to Man intended to continue to operate the store at that location. He also indicated that he lived in Thornbury and travelled to work by car when he worked at Epping. He said he would also have travelled to the Broadmeadows location by car if he had accepted that redeployment offer.

[18] Mr Mekkaoui’s submissions concluded by indicating he does not believe he was offered other “acceptable employment” because:

“1. I was given little notice of this new position on offer and closing of the Epping store;

2. The location of the new position does not offer the same or similar transport facilities;

3. There will be additional travel time and costs involved with the redeployment, which is not feasible for me; and

4. Given the constant changes to remuneration packages, recent closure of several Man to Man stores and that the employer recently underwent administration, I do not feel any sense of job security and guarantee of continuing employment.” 6

[19] He submits, in conclusion, that he is entitled to receive the full redundancy payment due to an employee with more than eight years’ service with his former employer.

Consideration

[20] Mr Mekkaoui is obviously disappointed that his role at Man to Man has been made redundant. His submissions also make clear he is unhappy about the way in which the issues to do with the closure of the Epping store, and his role being made redundant, were handled by his former employer.

[21] As indicated, both parties provided submissions in this matter dealing with the circumstances involving Mr Mekkaoui and the closure of the store at Epping. However, neither party made reference to the relevant statutory provisions or case law.

[22] The provisions now contained in s.120 of the Act have been considered in a number of previous decisions of the Tribunal. The question of what “obtains” requires was considered by a Full Bench in Australian Chamber of Manufactures v Derole Nominees [Derole Nominees] 7. It held, firstly, that it cannot mean obtain “…in the fullest sense possible” because one employer is incapable of affecting a contract of employment with its employees and another employer, and the word must be given “some lesser meaning.” The Full Bench concluded:

“Viewed in this way it will be seen that the intention is not to impose an absolute test on the employer’s ability to “obtain” alternative employment but rather it refers to action which causes acceptable alternative employment to become available to the redundant employee. The employer must be a strong, moving force towards the creation of the available opportunity.” 8

[23] In Datacom Systems Vic Pty Ltd v Rasiq Khan; Siddharth Desai [Datacom] 9 the Commission also expressed the view that the word “obtains,” in the context of s.120, should be given a very broad interpretation.

[24] The tests to be applied in determining what is “acceptable employment” are also well established. It is, firstly, a test to be applied objectively and not just by whether the employee wishes to take on the role being offered. “Acceptable” also means it must meet the relevant standard. The decision in Derole Nominees found that the considerations such as the work being of like nature, the location, the pay arrangements, the hours of work, seniority, fringe benefits, workload and job security are all relevant considerations in this context.

[25] The authorities also make clear that the onus of establishing that the alternative is “acceptable” rests with the applicant employer. They also indicate that in the exercise of its discretion the Commission may decide to remove a redundancy benefit obligation entirely, or instead reduce it. It has also been established that the employment being offered need not be identical in nature and in this context the following conclusions of Senior Deputy President Watson in Feltex Australia Pty Ltd v Textile, Clothing and Footwear Union of Australia 10 are noted:

“I accept the proposition advanced by Feltex Australia that acceptable alternative employment is not necessarily identical employment and that the AIRC has previously found alternative employment to be acceptable notwithstanding inconvenience to employees and some detrimental alteration to the terms and conditions of employment.” 11

[26] The Commission also found in Datacom that:

“Other employment does not cease to be “acceptable” merely because it is on terms that are less advantageous to that of the terminating position. Tontine makes it clear that there are matters of degree involved.” 12

[27] I have also had regard to the decision of Deputy President Sams in Spotless Services Australia Limited [Spotless], 13 which also involved a position being made redundant and a redeployment opportunity offered at a another location. In that matter the additional travel time to the new location was 25 minutes each way, making a total of 50 minutes extra travel time each day in circumstances where the employee was already travelling for around 50 minutes to and from work each day. Deputy President Sams indicated in his decision that while he had some sympathy for the employee, given the extra inconvenience and cost involved, he was unable to conclude that this constituted a sufficient basis for refusing the offer of a redeployment. He therefore concluded that the offer constituted “acceptable employment” within the meaning of s.120 of the Act and no amount of redundancy pay was applicable in the circumstances.

[28] It has already been acknowledged that Mr Mekkaoui is clearly disappointed by the way the Epping store closure and its impact on him was handled. He may well be entitled to have the view that these issues should the have been dealt with more appropriately in circumstance involving an employee with a long period of service with their employer.

[29] He is also of the view that he was given the option of redundancy by his former employer, and he accepted that offer, and it should now be honoured. However, I am not satisfied that the circumstances are as clear cut as Mr Mekkaoui suggests. An offer of redeployment was initially made to him involving the Craigieburn store, and it was indicated that if this was not acceptable he would be made redundant. However, when he rejected the Craigieburn option the further option of the Store Manager’s role at Broadmeadows was created by relocating another employee and offering that role instead to Mr Mekkaoui. I am not satisfied in these circumstances that Mr Mekkaoui is entitled to conclude he necessarily had a choice of redeployment or payment of his full redundancy entitlements. In any case in circumstances where an offer of redeployment is rejected it is always open to the employer to pursue an application under s.120 in regard to any redundancy entitlements due to the employee.

[30] In reviewing the circumstances of this matter in the light of the relevant authorities I am satisfied, firstly, that Man to Man did act to obtain other employment for Mr Mekkaoui. That redeployment option was in one of its other store locations.

[31] In terms of whether it can be considered to be “acceptable employment” there is little dispute between the parties that the role at the Broadmeadows store involved similar responsibilities and the same job title, together with the same pay arrangements. The only difference of any significance involves the store location, with the Brunswick store located approximately three kilometres from the Epping store. Mr Mekkaoui submits in response this additional distance would impose “travel and location constraints” for him.

[32] Based on the authorities I have referred to and the decision of Deputy President Sams in Spotless in particular, I am not satisfied that these “constraints” make the offer of a redeployment unacceptable. The differences in location between the two stores and Mr Mekkaoui’s home are not significant. He already travelled to work by car when at the Epping store, and would have travelled to work in this way if he had accepted the offer of redeployment to the store at Broadmeadows. There appears to be little by way of extra inconvenience and cost that would have resulted to Mr Mekkaoui if he had accepted this offer.

[33] I am therefore satisfied that Man to Man’s offer of redeployment from the Epping store to the Broadmeadows store was “acceptable employment” within the meaning of s.120 of the Act, and the onus on Man to Man to demonstrate that its offer constituted “acceptable employment” has been discharged. I accordingly consider that the amount of redundancy pay due to Mr Mekkaoui should be reduced to the amount of four weeks proposed by Man to Man. The application is granted and an order to this effect will be issued in conjunction with this Decision.

COMMISSIONER

Appearances:

Mr D. Mekkaoui, appearing on his own behalf.

Ms B Engert and Mr R. Young, Man to Man Pty Ltd T/A Man to Man.

Hearing details:

2015.

Melbourne:

11 November.

 1   Fair Work Act 2009(Cth) at s.120

 2   Submissions of Man to Man received by email on 27 October 2015

 3   Submissions of Dib Mekkaoui received by email on 4 November 2015, at page 2

 4   Ibid

 5   Ibid at page 3

 6   Ibid

 7 (1990) 140 IR 123

 8   Ibid

 9   [2013] FWC 1327

 10   PR974699

 11   Ibid at [89]

 12   [2013] FWC 1327 AT [9]

 13   [2013] FWC 4484

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